June 14, 2021

(AMP) Brussels warns Spain of the risk of not complying with the structural adjustment of the deficit in 2019

(AMP) Brussels warns Spain of the risk of not complying with the structural adjustment of the deficit in 2019



The European Commission has already sent the government a letter requesting clarification on the 2019 budget draft and in which it warns that Spain runs the risk of not complying with the structural effort to reduce the deficit required by European fiscal rules for next year.

"The planned structural effort in 2019 amounts to 0.4% of GDP, which is below the 0.65% of GDP required by the Council's recommendation of June 13, 2018. Based on the limited information available, we can not exclude a risk of some deviation with respect to the effort required, "says the text.

Brussels hopes to continue with the "constructive dialogue" with the Spanish authorities during the next few days and demands a response from the Spanish Executive at the latest on Monday, October 22.

In addition, it emphasizes that the budget draft foresees a growth of primary expenditure of 1.7%, a figure that exceeds the maximum recommended level of 0.6%, and doubts that Spain is capable of fulfilling the obligation to reduce its public debt. .

In the same way, the Community Executive stresses that the plan presented may not be the same as the one finally approved by completing the parliamentary procedure, and therefore requests the Government to send an updated budget "as soon as possible".

"If there are substantial differences between the budget plan and the budget sent to Parliament, we invite you to send an updated draft as soon as possible to the European Commission and the Eurogroup, as well as to inform us of any fiscal developments or decisions that may be taken in the next weeks, "the letter says.

CLARIFICATIONS ON THE IMPACT OF THE MEASURES

Beyond the figures, the letter criticizes that the budget plan "does not give a complete picture of the planned measures", so Brussels demands additional information on all of them and especially on their budgetary impact.

"It would therefore be important to give the European Commission all the necessary information on several measures, mainly with regard to its budgetary impact, in order to facilitate our evaluation," the letter emphasizes.

The document is signed by the General Director for Economic and Monetary Affairs of the Community Executive, Marco Buti, and has been sent to the Secretary General of the Treasury and Financial Policy, Carlos San Basilio.

The letter sent to Italy, however, was signed by the Vice President of the European Commission for the Euro, Valdis Dombrovskis, and by the Commissioner for Economic Affairs, Pierre Moscovici, as well as the letters that Brussels sent in 2016 and 2017 to the then Spanish Minister of Economy, Luis de Guindos.

In addition to Spain, the European Commission sent letters to Belgium, France, Portugal and Slovenia this Friday. These missives are sent only if Brussels detects a "particularly serious risk of non-compliance" with the rules of the Stability and Growth Pact. It is the first step to reject the budget of a Member State, although it is something that has never happened so far.

The EU executive sent the letter to Italy on Thursday, although it is a more serious case because the document warned that Rome's breach of the rules "is unprecedented" in the history of the Stability and Growth Pact.

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